Medicine Man Technologies, Inc. appointed Forrest Hoffmaster as new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Resignation of Nirup Krishnamurthy


On February 20, 2024, the Company received notice of the resignation of Nirup Krishnamurthy as a member of the Company's board of directors (the "Board") and Chief Executive Officer of the Company pursuant to the Amended and Restated Employment Agreement, dated May 4, 2023 (the "Krishnamurthy Employment Agreement"), with such resignation being effective as of February 20, 2024 (the "Separation Date"). Mr. Krishnamurthy tendered his resignation for personal reasons and not as a result of any disagreement on any matter relating to the Company's operation, policies (including accounting or financial policies) or practices.


In connection with Mr. Krishnamurthy's resignation, Mr. Krishnamurthy and the Company entered into a Separation Agreement and Release (the "Separation Agreement"), dated as of the Separation Date, whereby the Krishnamurthy Employment Agreement was terminated and the Company agreed to pay Mr. Krishnamurthy all accrued wages through the Separation Date, subject to standard deductions and withholdings. Further in accordance with the Separation Agreement, (a) Mr. Krishnamurthy has agreed to a general release of claims and a covenant not to sue in favor of the Company; and (b) the Company will provide Mr. Krishnamurthy with (i) severance for eight months at his current base gross salary rate; and (ii) pay for Mr. Krishnamurthy's monthly Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) premium for coverage beginning March 1, 2024 through a date is that is eight months following the Separation Date. Additionally, Mr. Krishnamurthy acknowledged that he no longer has any other rights to receive, acquire, possess, or vest into any additional shares, options, warrants, securities, derivative securities, Restricted Stock Units ("RSUs"), Performance Stock Units ("PSUs"), or other equity (collectively, "Equity") in the Company, other than such Equity that was fully vested on the Separation Date, regardless of anything to the contrary in any equity award agreement between Mr. Krishnamurthy and the Company.


The preceding summary does not purport to be complete and is qualified in its entirety by reference to the Separation Agreement attached hereto as Exhibit 10.01, and incorporated by reference herein.


Appointment of Forrest Hoffmaster


On February 21, 2024 ("Appointment Date"), the Board appointed Forrest Hoffmaster, the Company's Chief Financial Officer, as interim Chief Executive Officer of the Company. The Board will immediately commence a process to identify a permanent Chief Executive Officer for the Company. Additionally, the Nominating and Corporate Governance Committee of the Board will begin a search for a replacement director to occupy the seat vacated by Mr. Krishnamurthy.


Mr. Hoffmaster, who joined the Company in January 2023, brings over 30 years of executive experience in finance and operations for both public and private companies. Prior to joining the Company, Mr. Hoffmaster served as CEO of New Seasons Market, a specialty gourmet food retailer, where he navigated the company through one of the most disruptive periods in the retail grocery industry. Under his leadership, Mr. Hoffmaster implemented a focused growth and cost optimization program, enabling the company to grow EBITDA by over 30% in two years. Prior to New Seasons Market, Mr. Hoffmaster held leadership positions with other leading grocers including Whole Foods Market and H-E-B.


In connection with his appointment as interim Chief Executive Officer, Mr. Hoffmaster and the Company entered into an Amended and Restated Employment Agreement (the "Hoffmaster Employment Agreement"), dated as of the Appointment Date. Under the terms of the Hoffmaster Employment Agreement, the Board has agreed to (a) increase Mr. Hoffmaster's current base salary from $360,000 to $400,000, (b) provide Mr. Hoffmaster with a bonus in six months from the Appointment Date of $240,000 if he has met certain criteria set forth by the Board, and (c) if the combined value of the Equity that Mr. Hoffmaster holds as of February 21, 2024 does not exceed $750,000 (pretax), then at the time of a change of control of the Company, the Company shall compensate Mr. Hoffmaster the difference between the value of Mr. Hoffmaster's Equity as of the Appointment Date and $750,000.


The preceding summary does not purport to be complete and is qualified in its entirety by reference to the Employment Agreement attached hereto as Exhibit 10.02, and incorporated by reference herein.